The Basics: Option Exercise, Assignment & Expiration

As an options trader, it is important to understand the basics of exercise, assignment and expiration, especially if you are short options. Options have standard expiration dates. Monthly equity options expire on the third Friday of its expiration month. This is also the last day that they can trade.  If Friday is a holiday, the…

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More Profits in Crude Oil

Less than two weeks ago, I sold a /CL May ’15 75/30 Strangle for $0.22 ($220 premium received). When the strangle was initially sold, the IV Rank of /CL was at 82%. Since opening the trade, implied volatility has continued to contract. Today the IV Rank is at 74%. This contraction in volatility combined with time…

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The Basics: What is an Option?

I recently posted an article, “Why Trade Options?” in which I explored the merits of trading derivatives. In this article, I will explore the basics of option contracts and define the related terminology. An option represents a contract between a buyer and a seller. The buyer (or owner) of the contract has the right, but…

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Weekend Portfolio Analysis (February 28, 2015)

Market Conditions This week the market continued to trade in a very narrow range with the SPX opening the week at 2109.83 and closing lower on Friday at 2104.5, down 5.33 or 0.25% for the week. Data released on Friday showed that economic growth had slowed more sharply than originally thought in the fourth quarter of 2014. However, the S&P 500 posted…

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SPX Feb4 2040/2015 Credit Put Spread

The Weekend Portfolio Analysis on February 7, 2015 briefly mentioned that I have been experimenting with some weekly SPX credit spreads. Today I tweeted another SPX weekly trade that I placed. I just sold an SPX 2040/2015 credit put spread for $0.40. See all my trades at http://t.co/eLHQ7CrgUP pic.twitter.com/yVgZhjSns9 — Aram Basmadjian (@abasmadjian) February 23,…

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